Tax empty homes to boost rental supply, lobby group Launch Housing says
Australian Financial Review Apr 17 2016 4:47 PM
Michael Bleby
Victoria could boost the number of affordable homes by imposing a tax on properties left vacant for 12 months or longer, charity Launch Housing argues in a submission to the state government.
With as many as one-fifth of all investor-owned properties in Melbourne lying empty, the state government should follow the practices of some councils in the UK and proposals in British Columbia in Canada to penalise owners of vacant housing stock, the provider of homelessness services said.
Despite Melbourne's housing construction boom that saw local authorities approve a record 70,948 new homes in the 12 months to October - nearly a third of the national total 239,252 - rental affordability for low-income earners is worsening. The state government's own rental report, shows that the proportion of all new 'affordable' lettings - those allowing people in the lowest 40 per cent income bracket to spend no more than 30 per cent of their income on housing - across the state fell to 19 per cent in the December quarter from 22.2 per cent a year earlier.
Recommendations last month of the state's Royal Commission into Family Violence called for a 'blitz' on rehousing domestic violence victims who were stuck in crisis or transitional accommodation with nowhere else to go.
"The planning processes and approvals were done for solving the problem of providing housing," Launch Housing chief executive Tony Keenan told The Australian Financial Review on Sunday. "If it's not being used, we think the government is quite justified in intervening. It's [a tax] only levied on owners who make the decision to leave a property vacant. They need to contribute to solving the original problem."
The tax, based on council tax valuations, median dwelling prices or rents, could raise up to $78 million annually through measures such as boosting the council tax, the submission said.
Sydney has up to 90,000 empty properties, the UNSW's City Futures Research Centre estimated last month, saying they increased the argument against tax breaks such as negative gearing. Critics responded that the owners of empty dwellings were not entitled to claim tax breaks if the properties were not rented out.
A spokesman for Victorian Treasurer Tim Pallas on Sunday said the government was committed to implementing all of the commission's recommendations but would likely take the rest of the year to decide how best to do it.
The Property Council of Australia said any such move would break a pledge by the Labor government not to introduce any new taxes.
"Property owners would see the introduction of a vacant property tax as a broken election promise," said Asher Judah, a spokesman for the council's Victoria chapter. "While the cause may be just, this is about whether the Government keeps its word. The government should rule out this bad idea immediately."